Philadelphia filed a lawsuit incriminating Wells Fargo & Company. This is according to news reports which allege that the bank’s lending methods meant for minority mortgage borrowers are predatory hence violate the Fair Housing Act of 1968. However, Wells Fargo fervently denies the allegations by contending that their practices are fair thus claiming that the lawsuit made against them is unsubstantiated.
Filed on the May 15th in Eastern District U.S District Court of Pennsylvania, the lawsuit is just one of the latest problems that have been plaguing the bank as it is yet to recover from last year’s scandal where bankers created fake customer accounts in a bid to meet their sales goals.
The City of Philadelphia alleges that Wells Fargo Bank;
a) Steered non-white borrowers (both black and those of Hispanic decent) towards riskier loans which accrued higher interests yet they met the threshold to qualify for lower Interest and risk mortgages.
b) Made it hard for the said borrowers to finance their mortgages later thus forcing many of them into losing the assets used as loan collateral than was the case with white borrowers in similar situations.
The complaint was filed after a year’s investigation by the city into the workings of the bank. The conclusion that African American borrowers were twice and the Hispanics 1.7 times more likely to be receive higher interest loans and mortgage loans that riskier respectively as compared to the white borrowers was made after the city looked at 10-year period loans data.
The bank’s spokesperson came out to say that the city’s allegations against it are unsubstantiated. They are however yet to file their written legal answer.
About Karl Heideck
Karl Heideck graduated with honors from the Temple University Beasley School of Law in 2009. Before setting foot in the world of law, Karl Heideck was a 2003 graduate of Swarthmore College having done a Bachelor of Arts in English language and literature.
Karl Heidick’s legal practice is focused in compliance and risk management, civil litigation as well as helping Philadelphia clients. Currently working as an attorney at Grant & Eisenhower law firm, Karl Heideck is involved in reviewing discovery for banking litigation among other things such as risk management and securities fraud cases.
Find more about Karl Heideck: https://www.lawdeeda.com/profile/pennsylvania/philadelphia/19102/karl-heideck